Crypto payments send coins, or stablecoin tokens such as USDT, from your wallet to the recipient's address on a public blockchain. Once the network confirms a payment, no bank or card issuer can pull it back, and it carries none of the legal protections of a card payment. A legitimate merchant may offer crypto as one option at checkout. Anyone who demands it, by message, email or phone, is almost certainly a scammer. This page covers paying, not investing. It explains how a payment works, what the USDT payment method means, what can go wrong, how tax applies in the US and UK, and which rules are coming.
What a crypto payment is
Bitcoin was designed as a purely peer-to-peer form of electronic cash. Its 2008 whitepaper describes online payments sent directly from one party to another without going through a financial institution. Other coins and tokens follow the same basic idea.
A payment sent on chain is recorded on a public blockchain. According to the Federal Trade Commission, the record can include the amount and both the sender's and the recipient's wallet addresses.
The big difference from a card is what happens when something goes wrong. The FTC states that cryptocurrency payments do not come with legal protections, while credit and debit cards have a dispute process. With a card you can ask the issuer to investigate. With crypto, the payment stands once it is confirmed.
What the USDT payment method means
The USDT payment method means paying with Tether's USDT token instead of dollars or a volatile coin. USDT is a stablecoin designed to stay at 1 US dollar. Tether says its tokens are pegged 1 to 1 and backed 100% by its reserves. That is the issuer's own claim, not an independent guarantee. Tether's terms also say the tokens are not legal tender and are not backed by any government. There is no FDIC or SIPC protection.
People pay in USDT because it is designed to hold its dollar value and moves far less than Bitcoin. The peg is a target, not a guarantee, and the market price can move away from 1 dollar. For reserves, history and the risks of the token itself, read what USDT is and what backs it.
How to pay with USDT, step by step
If you are asking how to pay with USDT, the steps are the same for most recipients:
- Hold USDT in a wallet you control, protected by your seed phrase, or in an account at an exchange.
- Ask the recipient for their deposit address and the name of the network it uses.
- Choose the same network when you send. USDT runs on several, including Tron (TRC20) and Ethereum. Tether labels USDT on Ethereum, Avalanche, Cosmos, Celo and Kaia as "ERC20 Token", so ERC20 is a format used on more than one network, not a single chain.
- For a large payment, send a small test amount first and wait for the recipient to confirm it arrived.
- Check the address character by character before you confirm. A single wrong character sends the money somewhere else, and there is no way to ask for it back.
- Keep the transaction ID. It proves you sent the payment on chain, though not that the recipient accepted it.
Two network warnings apply. Tokens sent on a network the recipient does not support can be lost, and wrapped or bridged versions of a token are not Tether tokens and cannot be redeemed with Tether. Tether also stopped redeeming USDT on the Omni, Bitcoin Cash SLP, Kusama, EOS and Algorand networks from 1 September 2025, so an old network is a poor choice even if a recipient offers it.
What a payment costs
The sender pays a network fee, which is set by the network and shown in your wallet before you send. An exchange may charge its own withdrawal fee on top. Converting dollars or pounds into USDT or another coin can also carry a fee or a spread. Fees vary by network, by provider and by how busy the network is, so check the total in the wallet or exchange before you confirm.
Paying with Bitcoin and other coins
Bitcoin was designed around a new block roughly every 10 minutes, so a payment is not final the moment you press send. The recipient may wait for confirmations before treating it as paid. Ask the recipient what they require, and check the fee in your wallet before you send.
Paying with a coin whose price moves has a tax effect, covered below. A stablecoin keeps the amount steady, but tax rules still apply to it.
Where you can pay with crypto and how to check a store
Lists of stores that accept USDT go stale quickly, so this page does not keep one. Check each checkout yourself.
One dated example: on 28 July 2025, PayPal announced Pay with Crypto for US merchants, letting buyers pay with 100 cryptocurrencies including BTC, ETH and USDT. PayPal converts the crypto to a stablecoin or to fiat currency for the merchant. The 0.99% transaction rate PayPal charged merchants was introductory and ran until 31 July 2026. PayPal also states that digital assets, including its PYUSD stablecoin, are not insured by the FDIC or the SIPC. This is an example, not an endorsement.
To check a store:
- The crypto option should appear inside the store's own checkout, on the store's own domain.
- Be wary of any chat, email or message that asks you to send coins to an address outside the checkout.
- If you are unsure, pay by another method or contact the store through the details on its official site.
Crypto debit cards are the other route. Such cards usually convert crypto when you pay, and custody, conversion and fees differ from card to card. We do not cover them in a guide yet.
The risks of crypto payments
No chargeback
Because crypto payments carry no legal protections, there is no dispute process to fall back on. In the UK, the Financial Conduct Authority says crypto is largely unregulated and that it is highly unlikely you would be covered by the Financial Services Compensation Scheme if you lose money on it (page updated 29 January 2026). The FTC adds that money sent to a scammer is typically gone for good.
Frozen tokens
Tether's terms allow it to freeze tokens held by you as required by law, or where Tether decides in its sole discretion that it is prudent. This applies to tokens in a wallet you control as well as to tokens on an exchange.
Payment scams
The FTC puts it plainly: only scammers demand payment in cryptocurrency. No legitimate business or government will demand that you pay in crypto or message you to ask for money. Promises of guaranteed returns are another sign of a scam, because nobody can guarantee them. See common crypto scams and how to spot them for the patterns.
This domain once hosted a fake trading robot funnel. We explain what it was in our guide to the Bitcoin Billionaire trading robot scheme.
Tax when you pay with crypto in the US and UK
United States. The IRS treats digital assets, including stablecoins, as property, not currency. Under the IRS virtual currency FAQ, if you pay for a service with virtual currency that you hold as a capital asset, you have a capital gain or loss. It equals the fair market value of what you received minus your adjusted basis in the coins. Brokers report gross proceeds on Form 1099-DA for transactions from 1 January 2025. Keep your own records of each payment whether or not you receive one.
United Kingdom. HMRC treats using cryptoassets to pay for goods or services as a disposal, and Capital Gains Tax may be due (page updated 5 October 2026). Our guide to UK crypto tax rules has the detail.
Looking ahead, HMRC has published a measure, with draft legislation dated 13 July 2026, that would exempt disposals of eligible stablecoins from Capital Gains Tax for individuals and trustees from 6 April 2027. No individual tokens are named, so the measure does not say whether any particular token qualifies.
Rule changes coming for stablecoin payments
United States. The GENIUS Act, the first federal framework for payment stablecoins, was signed into law on 18 July 2025 as Public Law 119-27. It takes effect on the earlier of 18 January 2027 or 120 days after final regulations. From 18 July 2028, a digital asset service provider may not offer or sell a payment stablecoin to a person in the US unless a permitted issuer issued it, subject to exceptions.
United Kingdom. The new cryptoasset regime, including rules for stablecoins, is due to come into force on 25 October 2027. Until then, the FCA says its oversight of crypto remains limited to financial promotions and anti-money laundering controls.
Where to go next
If you are new to stablecoins, start with the USDT explainer, then read about how to choose and secure a wallet in our wallets guide.
Frequently asked questions
What is a USDT payment?
A USDT payment is a transfer of Tether's USDT token from one wallet to another. Tether says the token is pegged 1 to 1 to the dollar and backed by its reserves, but its terms state that it is not legal tender, not government backed and not covered by FDIC or SIPC protection.
How do I pay with USDT safely?
Use a wallet you control, choose the exact network the recipient names, send a small test amount first, check the address character by character and keep the transaction ID. These steps cut the risk of a wrong address or network. They do not protect you from a scam, a frozen token or a price that moves off the peg.
Which stores accept USDT?
Check at the checkout, not in a list. A real option appears inside the store's own checkout on its own domain. PayPal's Pay with Crypto, announced in July 2025 for US merchants, is one example that includes USDT. Be wary of anyone who asks you to send coins to an address in a chat or email.
Can a crypto payment be reversed?
In general, no. Crypto payments do not come with the legal protections that card payments have, and the FTC says money sent to scammers typically cannot be recovered.
Do I pay tax when I pay with crypto?
Often, yes. In the US, paying for a service with crypto held as a capital asset produces a capital gain or loss. In the UK, paying for goods or services with cryptoassets is a disposal on which Capital Gains Tax may be due.
